High Court of Madras14 August 2026

Managing Director, Tamil Nadu State Marketing Corporation Ltd. (TASMAC) v. K.R.Subramanian

For assessee

W.A (MD) NO. 679 OF 2021

The ruling in brief

Where employee was penalized for stock shortage in course of employment and GST was levied on penalty, such penalty did not constitute supply under paragraph 5(e) of Schedule II as it arose from employer-employee relationship, not supplier-recipient relationship, hence GST on such penalty is not attracted

Provisions considered

CGST S.7

Section 7 of Central Goods and Services Tax Act, 2017/Tamil Nadu Goods and Services Tax Act, 2017

This summary is for general information and is not legal advice. Read the full decision and the applicable law before relying on it.

The ruling in brief

Related rulings

Gujarat High Court14 Aug 2026

For assessee

Torrent Power Ltd. v. Union of India

Rule 28(2) prescribing 1% valuation for corporate guarantees was upheld, but the words “whichever is higher” were held arbitrary and unconstitutional; valuation must instead be based on actual consideration or the deemed 1% value, as applicable. GST: GST at deemed 1% valuation under Rule 28(2) could not be levied on corporate guarantees for periods before its insertion on 26-10-2023; such retrospective levy was harsh and unfair, though levy was permissible for periods thereafter, while guarantees to foreign subsidiaries were governed by Circular No. 225/19/2024-GST. GST: Corporate guarantees furnished by holding companies to banks for subsidiaries, even without consideration, constituted taxable supplies between related persons under Section 7(1)(a) read with Schedule I; subsidiaries were recipients, and GST levy on such guarantees was upheld. GST: Execution of corporate guarantees by holding companies for subsidiaries, though without consideration, constituted “business” under Section 2(17) and Schedule I, as activities incidental or ancillary to trade include safeguarding subsidiaries’ financial interests; volume, continuity or profit motive was immaterial. GST: Corporate guarantees were not “actionable claims” excluded by Schedule III, as a guarantor’s liability is contingent and secondary, unlike a direct right to debt; hence, corporate guarantees remained taxable supplies under the GST provisions. GST: Execution of a corporate guarantee secured by a share pledge constituted a taxable supply, as the pledge merely secured performance of the guarantee…

Supreme Court21 Jul 2026

For assessee

Union of India v. Gujarat Chamber of Commerce and Industry

SLP dismissed against order of high court that no GST is leviable on assignment of leasehold rights in an industrial plot with building, as such transfer of benefits arising from immovable property is not a 'supply'.'

AAR Gujarat24 Jun 2026

For assessee

Pon Pure Chemical India (P.) Ltd., In re

Compensation recovered from transporters for transit loss beyond tolerance limit stipulated in contracts, being liquidated damages for breach of contract, was not consideration for any supply; in absence of any agreement to tolerate breach, such amounts were mere compensation and not liable to GST

Related rulings

Gujarat High Court14 Aug 2026

For assessee

Managing Director, Tamil Nadu State Marketing Corporation Ltd. (TASMAC) v. K.R.Subramanian

The ruling in brief

Provisions considered

Managing Director, Tamil Nadu State Marketing Corporation Ltd. (TASMAC) v. K.R.Subramanian

The ruling in brief

Provisions considered

Read the full analysis

Torrent Power Ltd. v. Union of India

Union of India v. Gujarat Chamber of Commerce and Industry

Pon Pure Chemical India (P.) Ltd., In re

Read the full analysis